Construction spending nears decade-long low in January

Construction spending slumped 0.7 percent from $798 billion in December to $792 billion in January, the second-lowest seasonally adjusted annual rate since July 2000, the Associated General Contractors of America noted in a March 1analysis of new Census Bureau data. Association officials noted that nearly every private nonresidential category plunged, offsetting pickups in some residential and public nonresidential segments. They added that since January 2010, construction spending has declined by 5.9 percent.

Private nonresidential construction sank 6.9 percent from December and 13.2 percent from January 2010 levels. The figures for public construction were more positive, up 0.1 percent for the month and 2.9 percent for the year, largely thanks to ongoing federal spending for stimulus, military base realignment projects and hurricane prevention and recovery work around New Orleans. Much of this temporary work will dry up later this year. As a result, public construction spending is likely to decline in 2012, if not sooner, according to a March 1 AGC of America report.

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